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$150 Million GlaxoSmithKline Settlement Brings Whistleblowers $26 Million

Sep 24, 2005 |

Four whistleblowers from a pharmacy in Key West, Florida, are splitting $26 million of a $150 million settlement by international pharmaceutical giant GlaxoSmithKline, after the four partners exposed the drug company’s overcharging Medicare and Medicaid for two drugs used to treat cancer.

GlaxoSmithKline, a firm based in Philadelphia and London, which produces the antidepressant Wellbutrin, was accused of overpricing Zofran (1994-2002) and Kytril (1994-2000), two drugs commonly used to treat nausea in chemotherapy patients.

This case comes on the heals of several others  in which pharmaceutical companies are being sued for discounting the prices of certain drugs to retailers, while charging more to the government’s Medicaid and Medicare programs.

The government maintains that drug manufacturers must charge Medicare and Medicaid programs the “average wholesale price.”

Back in the 1990s, the whistleblowers noticed irregularities in the pricing of Zofran and Kytril, used primarily to treat nausea in chemotherapy patients. They filed their lawsuit in 1995. 

Most of Ven-a-Care's other cases also started in the 1990s and have been progressing slowly through the legal system. The accused drugmakers are tenaciously defending each action.

Under federal law, whistle-blower cases are filed anonymously, to protect the identity of the insiders who are complaining. Their identity only becomes public when the legal proceedings are well along.

Ven-A-Care's ongoing unsealed cases that are now out in public, include a massive federal case in Boston with 27 defendants, three cases in Florida with 10 defendants, and two in Texas with four defendants.

In essence, the members of Ven-a-care have become the government's “experts," testifying in court cases and before Congress.

Identifying instances of fraud has risen in recent years, as federal budgets for Medicare, the government health plan for the disabled and elderly, and Medicaid, the government health plan for the poor, have grown.

This is the fourth major case won by Ven-A-Care, a small pharmacy that specializes in chemotherapy infusions and other injectable drugs to critically-ill cancer and AIDS patients.

According to the pharmacy’s attorney, whistleblowers from Ven-A-Care have saved the government over $700 million.

In a statement issued by GlaxoSmithKline, the firm said that the government knew of its pricing practices for a while, but had not objected. Nevertheless, the firm said it has decided to settle the case, “without admitting any wrongdoing.”

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